RDSP Bulletin No. 2R3
This bulletin cancels and replaces RDSP Bulletin No. 2R2 dated November 20, 2015.
This bulletin has been updated to include a nurse practitioner as a person who can certify that a beneficiary has a shortened life expectancy, and describes changes to section 146.4 of the Income Tax Act as introduced in Bill C-3 and Bill C-45.
The definition of specified year was amended in Bill C-3 to include the time that an RDSP is designated an SDSP until the time that the SDSP designation is removed. For the purpose of an SDSP, a specified year will not include any calendar year before the calendar year in which a medical certification affirming the beneficiary’s shortened life expectancy is provided to the RDSP issuer.
Specified disability savings plan
An RDSP is not considered an SDSP unless the following actions are completed:
- a medical doctor, or a nurse practitioner who is licensed to practice under provincial laws or who is licensed to practise under the laws where the beneficiary resides, certifies in writing that in his or her professional opinion the beneficiary will not live longer than five years;
- the holder of the RDSP provides the issuer with the medical certificate and an election containing prescribed information that designates the plan as an SDSP; and
- the issuer notifies the Minister of Employment and Social Development (ESD) of the SDSP election according to the Minister’s requirements.
The SDSP designation takes effect when the Minister of ESD receives the issuer’s notification.
Removal of the SDSP designation
An RDSP is no longer considered an SDSP at the earliest of the following times:
- the time that the Minister of ESD receives notification (according to the Minister’s requirements) from the issuer that the plan holder has elected to remove the SDSP designation from the plan;
- immediately before the earliest time in a calendar year when the total taxable amount of all disability assistance payments made in that year when the plan was an SDSP, exceeds $10,000 [if paragraph (11) requires that a larger taxable amount be paid from the plan then the total withdrawal for the calendar year will be determined by the condition in paragraph (11)];
- immediately before the time a contribution is made to the plan. Note that for the purpose of an SDSP, a specified RDSP payment is not considered a contribution;
- immediately before the time a Canada disability savings grant, Canada disability savings bond, or designated provincial program payment is paid into the plan;
- immediately before the time an amount is paid into the plan where the amount was paid because of or under a program whose purpose is similar to a designated provincial program and the amount was funded directly or indirectly by a province;
- immediately before the time an accumulated income payment is made to the plan;
- immediately before the plan is terminated;
- immediately before the plan becomes non-compliant as a result of the application of paragraph 146.4(10)(a) of the Act;
- immediately before the beginning of the first calendar year throughout which the beneficiary is not eligible for the disability tax credit;
- if disability assistance payments have not begun to be paid before the end of the particular calendar year following the year in which the plan has last been designated an SDSP, immediately following the particular year; and
- immediately following the end of a calendar year (that is not the first year of the SDSP) if the total amount of disability assistance payments made from the plan in that year is less than the year’s legislated maximum formula result (or a lesser amount that is supported by the property in the plan).
Once a plan has ceased to be an SDSP, the holder of the plan may not make another SDSP election until 24 months after the SDSP designation was last removed from the plan.
The Minister of National Revenue may waive the limitations noted in paragraphs 1) to 11) and the 24 month waiting period for re-election if the Minister feels it is just and equitable to do so. To request a waiver, the issuer must send a letter to the Minister of National Revenue by using the address or fax number noted under the heading How to contact us. The letter should indicate which condition the issuer would like waived, the reason for the waiver request, and any additional information that supports the request.
The RDSP issuer will not need to amend their specimen plan(s) to accept an SDSP designation on an RDSP. If the issuer wishes to allow a holder to request an SDSP designation on a beneficiary’s plan, the issuer must provide the holder with a document containing prescribed information for the holder to use as the SDSP election. The issuer is to treat the holder’s election as an addendum to the beneficiary’s plan and should attach the addendum to the beneficiary’s file.
The issuer must provide the Registered Plans Directorate with a copy of the SDSP election document for our files before allowing a holder to file an election and designate their plan as an SDSP.
Questions regarding the Minister of ESD’s administrative requirements should be sent by email to email@example.com.
Prescribed information for an SDSP election
The issuer must include the following information in the SDSP election document:
- a statement that the holder wishes to designate the beneficiary’s plan as an SDSP with a space for the holder’s signature and date;
- the list of actions, as identified under the heading, Removal of the SDSP designation, that require removal of the SDSP designation from the plan;
- if specified year (or an equivalent term) is defined in the beneficiary’s RDSP, a statement that the plan’s definition of specified year must be read to include years in which the plan is an SDSP (see information under the heading, Specified year); and
- a statement informing the plan holder that once the plan has ceased to be an SDSP, the holder of the plan may not make another SDSP election until 24 months after the SDSP designation was last removed from the plan.
How to contact us
Contact us at the Registered Plans Directorate if you have any questions about this RDSP bulletin.
Our telephone enquiries service is available Monday to Friday from 8:00 a.m. to 5:00 p.m., Eastern Time. A voice mailbox system takes messages outside those hours. Messages will be returned the following business day.
In the Ottawa area
For service in English: 613-954-0419
For service in French: 613-954-0930
Toll-free elsewhere in Canada
For service in English: 1-800-267-3100
For service in French: 1-800-267-5565
RDSP issuers who need guidance on specific registration issues can write to us at the Registered Plans Directorate, Canada Revenue Agency, Ottawa ON K1A 0L5, or fax us at 613-952-0199.
We welcome feedback on this bulletin. Email your comments to RPD.LPRA2@cra-arc.gc.ca.
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